March 8, 2016
In what may come as a major relief for the highway sector, the Reserve Bank of India (RBI) is expected to allow banks and financial institutions to lend o companies even if a project turns into a non-performing asset.
Sources said the indication came during a meeting between governor Raghuram Rajan and NHAI chairman in Mumbai. The RBI governor told Chandra that the central bank has come out with a circular, clarifying that a project becoming NPA will not result in choking of fund flow and it will not translate into lenders stopping loans, sources added. “We were told hat when any investment becomes NPA, the financial institutions have to provide additional funds for this. They need to deal with such project carefully rather than stopping release of loan. They will provide us this circular,” said an NHAI official.
July 24, 2014
Soon, people travelling on Chennai-Bangalore Highway will enjoy better green cover on a portion of it.
The Poonamallee municipality has set the ball rolling for a project to develop a green belt along a four-km stretch.
As part of its efforts to beautify the stretch and prevent illegal dumping of waste on the roadside, the municipality has joined hands with corporates to survey the area.
Chennai:A core committee, comprising corporates and municipal officials, has been formed to chalk out an action plan to beautify the stretch between Doosan company and the BSNL office falling under the local body’s jurisdiction.
The beautification project will include developing the greenery and illumination along the roadsides.
Officials of the municipality said estimates are being prepared to develop a green belt. The number of encroachments is also being identified.
Municipal commissioner B.V. Surendra Sha said the local body has sought the assistance of industries in and around Poonamallee to take up the beautification of the stretch as a CSR initiative.
Residents of Seneerkuppam and Poonamallee want the local body to speed up the project as garbage is being dumped along the Cooum river and road margins.
“We are planning to use 10 metres of space on roadsides for the project and also rope in corporates to maintain the facilities,” he said.
The work will be completed in two months with the consent of the National Highways Authority of India. The municipality also plans to develop green cover in Poonamallee at a cost of Rs. 5 lakh.
Source: The Hindu
July 15, 2014
Preparatory work has commenced for the six-laning of a 93-km stretch on the Chennai-Tiruchi highway (NH45) from Tambaram to Tindivanam.
According to sources in the National Highways Authority of India (NHAI), the consultant has begun preparing the land plan schedule that identifies government and private lands. The consultant is also drawing up the estimate for shifting of utilities along the road that is used by over 90,000 vehicles a day.
The process including enumeration of trees along the road will take two years. “Since the concessionaire has a contract to build, operate and transfer the road for a period of 17.5 years, which is till November 2019, the NHAI will take a call as to when the work can be taken up,” explained an official. Work to widen the road into a four-lane facility began in May 2002 and was completed in October 2004 when tolling began.
A decision will also be taken regarding widening of the urban stretches upto Tambaram. “We have to take into consideration various factors including the Chennai Outer Ring Road that takes off from Vandalur, the railway track running on one side of the road and the densely populated urban stretch. Land acquisition will be a major issue in these areas,” he said.
R. Samban, who recently travelled by the NH45 to Tiruchi, said that the lighting could be improved on some stretches. “Some of the curves are quite sharp. During the widening, care must be taken to improve visibility at these points. The NHAI must also ensure that trees along the road are not cut but transplanted,” he said.
July 1, 2014
Mr. Nipun Soni is Management Graduate with over 15 years of experience and in depth knowledge of BOT plus front line experience of toll operation, sales and customer service. He was a part of mobilization team of 2 BOT Projects (Delhi Gurgaon and Bangalore elevated Toll way Limited) plus setting the system and procedure for the biggest Point of Sale Operations in India at Delhi Gurgaon Super Connectivity Ltd, also he was involved in setting up and mobilizing the operations for Multi-Level Car Parking ( capacity of 4300 cars ) in Delhi International Airport . He is involved in setting up SOP and ensuring the implementation of the same across various concessionaires.
Mr. Soni has been involved in Setting up of establishments, right from back end to front end to delivery i.e. Equipment Design, Procurement to Installation and Commissioning of the Project .Involved in starting Commercial operations and stabilizing Operations and Maintenance and meeting expectation of the Management with Optimization of Revenue while maintaining good health of Project and good relations across with the Client and Customer while meeting all social obligations.
Editorial:Ways of Pilferage
Checks that can be put in place
|1.||Extra Wide Lane / Two Wheeler Lane
|4.||Local LCV & Truck
|5.||Bar Code Transaction
|6.||Tamper with the System
December 23, 2013
JAIPUR: Finally, after being at loggerheads for several months on various issues regarding widening of Jaipur-Gurgaon stretch of national highway (NH-8), the state government andNational Highways Authority of India (NHAI) has reached a consensus on two major impediments. NHAI received an estimate for the relocation of two high-tension power (HTP) lines on Wednesday, while the state government handed over the land at Sanjay Van to the authorities.
After dilly-dallying for 20 months, the Jaipur Vidyut Vitran Nigam Limited (JVVNL) has given the total costing for the relocation of two HTP lines from Jaipur bypass. The JVVNL will roughly take two months for processing the tender and another two months for shifting it after which NHAI is expected to start construction in the patch.
NHAI is examining the estimate and clarification submitted by the electricity board and is likely to take final decision on it soon. The issue was pending with the Jaipur discom for past many months leading to a delay in widening the stretch. However, after a team of engineers went to Japan to study the technology for transfer of lines, the JVVNL has agreed to initiate the work.
In another major breakthrough, the state government provided land to the concessionaire for carrying out work at Sanjay Van. Earlier, the government was demanding construction of a boundary wall from the developer in lieu of handing over the forest land, which NHAI rejected. It maintained that a payment of Rs 1.15 crore has already been made to forest department as a part of compensation. After intervention from the officials of NHAI and state government, the issue was finally settled.
“Our efforts are on to remove all hindrances for all the national highway projects in the state including important linkage between Delhi-Jaipur. I am hopeful that most of the issues will be sorted out soon and inconvenience caused to commuters will be reduced to minimum possible extent,” said AK Mishra, chief general manager (technical-NHAI), Rajasthan.
Jaipur: After locking horns for several months on various issues in widening of Jaipur-Gurgaon stretch of national highway (NH -8), the state government and National Highway Authority of India reached a consensus on two major impediments. NHAI has received an estimate for the relocation of two high tension power (HTP) lines on Wednesday while state government has handed over the land at Sanjay Van to the authority.
After dillydallying for 20 months the Jaipur Vidyut Vitran Nigam Limited has given the total costing for the relocation of two HTP line from Jaipur bypass. The JVVNL will roughly take two months for processing the tender and another two months for shifting it after which NHAI is expected to start construction in the patch.
NHAI is examining the estimate and clarification submitted by the electricity board and is likely to take final decision on it soon. The issue was pending with the Jaipur discom for the past many months leading to delay in widening of the stretch. However after a team of engineers went to Japan to study the technology for transfer of lines, the JVVNL has agreed to initiate the work.
In another major break through, the state government provided land to the concessionaire for carrying out work at Sanjay Van. Earlier, the government was demanding construction of a boundary wall from the developer in lieu of handing over the forest land, which NHAI rejected. It maintained that a payment of Rs. 1.15 cr has already been made to forest department as a part of compensation. After intervention from the officials of NHAI and state government issue was finally settled down.
“Our efforts are to remove all hindrances for all the national highway projects in the state including important linkage between Delhi-Jaipur. I am hopeful that most issues will be sorted out soon and inconvenience caused to commuters will be reduced to minimum possible extent” said AK Mishra, chief general manager (Tech), Rajasthan.
December 23, 2013
Press Trust Of India : New Delhi,
The highways ministry expects projects worth over Rs 1 lakh crore, which have been stuck for long, to start moving from next month as a concrete decision on the rescheduling of premium paid by developers is expected by the end of this month.
“I am hopeful that highway projects worth over Rs 1 lakh crore would be on stream next month onwards. The report of C Rangarajan Committee on premium rescheduling is likely to be accepted by month-end,” road transport and highways minister Oscar Fernandes told PTI.
The government has constituted a panel, headed by Prime Minister’s Economic Advisory Council C Rangarajan, to look into the issues pertaining to bailout of highway developers. The government had approved a proposal in October for the postponement of premium payments by highway developers and has referred the matter to the Rangarajan panel.
The move is likely to provide relief to a large number of players such as GMR, GVK and Ashoka Buildcon.
Their projects have been facing delays on account of high premium — the payment made by developers to the National Highways Authority of India under the BOT mode.
The premium, which is offered by companies during the bidding stage, is based on projected returns from tolls.
December 17, 2013
By Express News Service – BANGALORE
Chief Minister Siddaramaiah, who is on a two-day visit to Delhi, met Union Urban Development Minister Kamal Nath on Monday and sought funds for various highway projects being undertaken in the state.
According to official sources, during Siddaramaiah’s over half-an-hour meeting with the Union minister he submitted a memorandum on the projects which were being taken up in the state under the Jawaharlal Nehru National Urban Renewal Mission (JnNURM) and National Highways Authority of India (NHAI).
He also met Union Health Minister Gulam Nabi Azad and conveyed concerns of the arecanut farmers following an affidavit submitted by the Health Ministry to the Supreme Court supporting the ban on areca.
Later, Siddaramaiah told reporters that the Centre has not submitted any affidavit suggesting the SC to impose ban on the use of arecanut.
“We also brought to the notice of the Union Health Minister the medicinal properties of areca,” he said.
Higher Education Minister R V Deshapande, Urban Development Minister Vinay Kumar Sorake, Congress MPs H Vishwanath and R Dhruvanarayan and MLAs S R Mahesh and Chikkamadu were also present.
November 18, 2013
Santosh Sonawane, TNN |
Commissioner of Police Kulwant Kumar Sarngal said officials of the NHAI had approached him for protection during the encroachment drive. Police personnel were deployed for the purpose, he said.
Sources in PNG Tollways said the drive would be conducted more often as the encroachers tended to return to the place they were removed from.
A number of Chinese food and tea stalls are set up on the stretch between Pathardi Phata and Dwarka. Also, flower vendors at Mumbai Naka, most of who are children, obstruct the traffic that poses a danger for them too.
The vehicles parked at the garages on the highway’s service road also obstruct passage. Sources in PNG Tollways said an anti-encroachment drive concentrating on the garages would be conducted soon.
On being asked about a parking facility for autorickshaws and taxis at Dwarka, officials from the PNG Tollways said they would reduce the size of the traffic islands at the junction to create a 1.5 metre-wide lane on the service road to accommodate these vehicles. The police and association of rickshaw and taxi drivers had suggested such an arrangement.
Encroachments on the median of the highway and on the service road that passes through the city have become a major issue as vehicles are seen moving at a slow pace in spite of the road’s widening.
November 14, 2013
The recent restructuring exercise of road contracts demonstrates India’s adaptability but a road regulator – not a committee – is needed
On October 8, 2013, the Union Cabinet gave an “in-principle” approval to a one-time premium restructuring package for a slew of premium-based road contracts that had become “stressed” on various counts. The government subsequently constituted a committee under C Rangarajan, chairman of Prime Minister’s Economic Advisory Council (PMEAC), to detail out the eligibility conditions and terms of the scheme. The committee empanelled five members, and is expected to come up with its recommendation in December. The five members of the committee are ministry of road transport & highways (MoRTH) Secretary Vijay Chibber, Planning Commission Secretary Sindhushree Khullar, PMEAC Secretary Alok Sheel,
National Highway Authority of India (NHAI) Chairman R P Singh and Expenditure Secretary R S Gujral. A representative from the private sector, an independent business leader, would have been a useful addition considering it is a public-private partnership (PPP) matter.
The “in-principle” Cabinet approval was welcomed by all the concerned developer groups, many of whom are currently incapable of supporting their projects in their existing form. This is because of their own financially stressed positions, unexpectedly low traffic, delays in sovereign deliverables, and in some cases – aggressive and irrational bidding. The relief package involves back-ending the scheduled premium payments in the initial years when traffic is lower, growth drivers indeterminate, and capital requirements and debt servicing at their peak. This relief in the initial years is to be compensated by higher premia in subsequent years, so that the net present value (NPV) of the promised cash flows to NHAI remain protected.
The opposition to the scheme is primarily on the issue of moral hazard and the adverse impact that any such ex-post accommodation mechanism has on the sanctity of bidding processes.
Although one cannot obviously question the imperative to avoid such events in the future, for now at least, practical considerations point towards going ahead with the reset for the following seven reasons:
(1) Renegotiations need to be understood, accepted and imbibed as an integral part of PPP processes, especially at the early stage of their evolution. An overview of more than 1,000 PPP concessions studied by the World Bank Institute in Latin America and Caribbean from 1985-2000 throw up these characteristics of PPP renegotiations:
- 41.5 per cent have undergone renegotiations.
- Out of the total concessions in transport infrastructure sector, 55 per cent of the concessions underwent renegotiations.
- 85 per cent of renegotiations occurred within four years of concession awards and 60 per cent occurred within three years.
- Renegotiations occurred mostly in concessions awarded through competitive bidding.
So, renegotiating a PPP project is by itself not taboo.
(2) It is clear in hindsight that the magnitude of risks and the ability of different stakeholders to manage them had not been adequately assessed. The private sector has shown through its overaggressive traffic estimation, high-debt leveraging and exuberant bidding that it often lacks management maturity, as well as risk assessment and forecasting skills. NHAI has also conclusively demonstrated its inability to eliminate outlying bids, procure sovereign clearances, perform timely land acquisition and clear due processes in clearly defined and accountable time frames. The need for contract renegotiations becomes inevitable till such shortcomings are addressed.
(3) From NHAI’s point of view, the high premiums accruing to it, even after the reset, would no way compare to the expected low or vanishing premia if the projects were to be put up for rebidding in the current adverse investment mood and environment. NHAI is estimated to receive more than Rs 1.51 lakh crore over the next 20 years from developers in return for awarding projects. If the projects were to be rebid, it is not unlikely that over-cautious developers could consider a 30 to 40 per cent decline in traffic projections that could effectively wipe out any premium, or even bring the bidding to a request for viability grant.
(4) Rebidding will inevitably lead to huge delays in getting these projects off the ground, and would mean further increases in project costs. It would adversely affect all downstream benefits of gross domestic product growth, job creation, spur to the construction sector, capital-goods sector order-book accretion and a required resurgence of the investment sentiment, particularly PPP sentiment.
(5) The NPV-neutrality, as a public-policy paradigm, passes the test of transparency and fairness. It legitimises the eligibility of the highest bidder to continue. GMR, for example, under the back-ended schedule, is believed to have to pay up in Rs 59,000 to 65,000 crore over its 26-year period as against Rs 32,000 crore originally.
(6) Annulling of the previous bids will send serious negative signals to domestic and global investors.
(7) Unlike the recently allowed compensatory tariff dispensation by the Central Electricity Regulatory Commission (CERC) for imported coal-based ultra mega power projects, there is no alteration in user charges (toll) as part of the restructuring.
At an office discussion led by Rajeev Bhatnagar and Debal Mitra of the Highways Division, the following views were offered on some contentious points:
(i) Coverage and eligibility: The road ministry is considering the bailout of only 23 projects but the developer community has opined that the package should be made available to all affected premium-based projects (estimated at 40 plus in number) as similar financial impediments would be faced by most, if not all. A parameter-based “stress” ranking should determine nature and grades of relief to be considered.
(ii) Discounting rate: The 12 per cent discounting rate proposed by the Cabinet seems harsh, to the point of being unacceptable, considering it had approved a rate of 9.75 per cent for the spectrum fee deferrals by telecom operators last year. Besides, the rate is based on existing interest rate levels as benchmarks that are at the high end, whereas for a typical concession period of two decades or more, one should consider mirroring through-the-cycle interest rates. Burdening the already leveraged projects with higher discounting rates would defeat the purpose of the bailout. A 10 per cent discounting rate appears fair.
(iii) Penalty: The Cabinet has also proposed levying an exemplary penalty of up to 0.5 per cent of project cost, if the default is attributed to the developer. This is conceptually acceptable both as a penalty and as a deterrent.
(iv) Bank guarantee: There is a view that developers furnish a bank guarantee to the extent of the maximum difference between the earlier and current premium. Since the original concession agreement did not impose the submission of any bank guarantee for the premium, bank guarantees for the incremental amount seem illogical.
(v) Premium re-scheduling: Developers have demanded a moratorium of 6 to 8 years, while the Planning Commission has proposed a set percentage of premium gaps being backloaded every year. Given that the specifics of each project are different, the most appropriate stance will be to leave it to NHAI to decide the optimal schedule bilaterally with the developer.
(vi) Empower NHAI after committee decision: Once the Rangarajan Committee has conveyed the format, NHAI should be fully empowered to settle with concessionaires. Kicking the settlement can once again between the PMO, law, finance, Planning Commission, MoRTH et al should be clearly avoided.
(vii) Road regulator: As I have stridently argued in an earlier Infratalk (Road regulator needed by yesterday, July 3) having an empowered and credible road regulator would have allowed the system to effect a solution much earlier rather than this practice of creating ad-hoc committees for every problem that surfaces.
In conclusion, this highway premium restructuring exercise, along with the recent imported-coal price pass-through decision by CERC, is demonstrating India’s ability to gradually come to grips with PPP renegotiations as an inevitable process issue.
November 13, 2013
BAHRAICH: The Union rural road ministry has approved Rs 500 crores for the construction of roads on Barabanki-Rupaidiha National Highway (on Indo-Nepal border). The Lucknow unit of national highway construction plans to construct bypass in Bahraich city and Nanpara to prevent heavy vehicles from entering the city.
The project would be executed in two phases. Executive engineer SC Pathak, of national highway construction unit, said following that construction of highway would lead to an increased pressure of heavy vehicles on city roads. This would lead to traffic jams. “Hence, we have proposed construction of a bypass outside the city. We are already searching land for the same. The bypass would be construction on the land cleared by the government for acquisition to prevent entry of heavy vehicles in the city,” he said.
The executive engineer said that the pressure of heavy vehicles was more in Nanpara and added that the existing bypass would be modified.
Bahraich residents dream of development has been hit hard by pitiable condition of roads. The road linking the district to the state capital too is in a bad state.
The condition of road linking Barabanki to Rupaidiha on Indo-Nepal border too was quite bad. As a results, mishaps are quite common. A year ago patch work was undertaken to clear the road of potholes but in vain. Three years ago the road was acquired by National Highway Authority of India but that the change failed to bring about any change in its fortune.